Apparatus and methods for processing misread or miskeyed magnetic indicia

ABSTRACT

The present invention is directed to methods and apparatus for processing check data, such as data stored using magnetic indicia. In one embodiment, a check transaction processing system receives an indication that a first check transaction from a first payor failed to clear because at least a portion of first MICR or other account data associated with the first check transaction is incorrect. The check transaction processing system reads a personal identifier associated with the first payor, wherein the personal identifier was provided in association with the first check transaction. MICR data or other account data associated with a previously processed check transaction associated with the personal identifier is located. At least a portion of the located MICR or other account data is compared with at least the portion of first MICR or other account data associated with the first check transaction, and based at least in part on the comparison, the check transaction processing system determines if the portion of the located data is at least a potentially correct version of the portion of first MICR or other account data.

This application is a divisional of U.S. application Ser. No.10/057,001, filed on Jan. 25, 2002, the entirety of which is herebyincorporated herein by reference.

BACKGROUND OF THE INVENTION

1. Field of the Invention

The present invention relates to processing magnetic indicia, and inparticular, to methods and apparatus for processing misread or miskeyedmagnetic indicia formed or stored on financial instruments.

2. Description of the Related Art

Checks are one of the most common forms of making non-cash payment.However, the processing of physical checks can be manually intensive andso it has become common for checks to be electronically processed. Forexample, when a customer makes a purchase at a merchant's point of saleterminal, the cashier scans the magnetic ink character recognition(MICR) characters printed at the bottom of a check using a check readerterminal. Alternatively, the customer or merchant may manually key inthe MICR data. The MICR characters typically include the customer'schecking account number. In addition, the MICR indicia can include thedrawee bank's transit or routing number, and the check sequence number.

The cashier manually enters the check amount using the point of saleterminal. The cashier may also capture an image of the check. Inaddition, to provide greater security, some merchants obtain thecustomer's driver's license number or alternate ID by scanning themagnetic strip on the customer's driver's license or by keying in thedriver's license or alternate number, or by having the customer key intheir driver's license or alternate number. Alternatively, merchant'ssometimes have websites, wherein the customer enters the MICR and IDdata by keying in the data into an electronic form rather than via apoint of sale store terminal.

The checking account number, other MICR data, the check amount, thedriver's license number or alternate ID number, and other transactionrelated information may be sent to a check processing service. The checkprocessing service then validates the information, and if the consumerauthorized the transaction for automated electronic check processing,the check processing service submits the MICR data, including checkingaccount number, check amount and other related information to a checkclearinghouse, such as the Automated Clearing House Network (ACH). ACHprovides for the inter-bank clearing of electronic payments forparticipating depository financial institutions. The customer's accountis then debited for the amount of the check by the debited bank.

Unfortunately, the process of reading and decoding check MICR charactersis often somewhat unreliable. In the case of manual entry, consumer andmerchant input of the MICR line data can also be unreliable due to thetransposing of numbers and/or the miskeying of the numbers. Indeed, itis estimated that about 10% of administrative check returns are theresult of incorrect MICR readings or miskeying, also known as decodingerrors. For example, if the MICR characters are misread or miskeyed, thecheck may be submitted to the wrong bank and will not be cleared.Alternatively, the check may be submitted to the correct bank, but withan incorrect account number, and so the check will not clear. Themisreading or miskeying can be random, that is, it is not easy topredict the location or the character that will be misread or miskeyed,or how a misread or miskeyed character will be interpreted. Thus, evenwhen check processors have attempted to research to resolve what theaccount number might be, the result is usually incorrect and the checkfails to clear. Because the account number is not accurate, the check issimply never cleared, resulting in significant financial losses on thepart of merchants or check processing company.

SUMMARY OF THE INVENTION

Embodiments of the present invention relate to processing magnetic data,and in particular, to methods and apparatus for processing misread,miskeyed or otherwise corrupted magnetic data located on financialinstruments. Other embodiments of the present invention relate toprocessing financial instrument indicia that were misread using anoptical scanner or magnetic reader, or where the customer or merchantmiskeyed the MICR.

In particular, one embodiment of the present invention is directed toprocessing check MICR (magnetic ink character recognition) indicia andthe like. Methods and apparatus are provided for selecting alternateMICR data when check MICR characters, such as account numbers, arecorrupted. For example, the MICR characters may have been misread ordecoded incorrectly or miskeyed by the customer or merchant. Thus, thepresent invention advantageously enables a higher rate of checkclearance with resulting benefits to merchants and check processingoperators.

In one example embodiment, if a check has failed to clear because thecustomer's account number was corrupted, an attempt is made to find acorrect account number for the check. If the check had been submitted ata point of sale terminal, or using an electronic or paper form, with anassociated separate or personal identification code, such as a driver'slicense number, state or government issued ID, personal device ID (suchas a transponder ID), private label card number, social security number,or other identifier, that identification code is located and read from atransaction database. The transaction database is then searched tolocate MICR data of previously or subsequently cleared checks associatedwith the separate identification code. A comparison is made between thecorrupted MICR data and the located MICR data. If the comparisonindicates that one of the account numbers included in the located MICRdata is close to the incorrect check account number, then that checkaccount number is used as an alternate check account number. Inparticular, in one embodiment if a check account number is located thatdiffers from the incorrect account number by less than a first amount,then that located account number is designated as the correct accountnumber. The check is then resubmitted for clearing with the designatedcorrect account number.

By way of further example, each digit of the incorrect, corruptedaccount number is compared with a corresponding digit in one of thelocated account numbers. If an acceptance criterion is met, for example,where less than a predetermined number of digits differ, then thatlocated account number is used when resubmitting the check for clearing.The acceptance criteria may vary based on a number of factors, such asamount of the check at issue, how the check MICR data was entered, howlong ago the located account number was last used, and/or other factors.In addition, if more than one of the located account numbers differ fromthe incorrect account number by more than a predetermined number ofdigits, optionally, none of the located account numbers will be used ina resubmission of the check.

In one embodiment of the present invention, a check transaction isprocessed as follows. An indication is received that a first checktransaction from a first payor failed to clear at least in part becausea first account number associated with the first check is erroneous. Aseparate identifier for the first payor is located. A first previouslycleared check transaction associated with the separate identifier islocated. A second account number associated with the separate identifieris read and compared with the account number of the first previouslycleared check transaction. At least the first account number is comparedwith at least the second account number. A determination is made as towhether the second account number meets a first criterion, which therebyindicates the second account number is potentially a correct version ofthe first account number.

In another embodiment of the present invention, a financial transactionis processed as follows. An indication is received that a firstfinancial transaction from a first payor failed to clear at least inpart because a first account number associated with the first financialtransaction is erroneous. A separate identifier for the first payor islocated. A first previously processed financial transaction associatedwith the separate identifier is located. A second account number isread, the second account number associated with the first previouslyprocessed financial transaction. At least the first account number iscompared with at least the second account number. A determination ismade as to whether the second account number meets a first criterion,which thereby indicates the second account number is potentially acorrect version of the first account number.

For purposes of summarizing the invention, certain aspects, advantagesand novel features of the invention have been described herein. It is tobe understood that not necessarily all such advantages may be achievedin accordance with any particular embodiment of the invention. Thus, theinvention may be embodied or carried out in a manner that achieves oroptimizes one advantage or group of advantages as taught herein withoutnecessarily achieving other advantages as may be taught or suggestedherein.

BRIEF DESCRIPTION OF THE DRAWINGS

FIG. 1 illustrates an example check processing system.

FIG. 2A illustrates an example check processing process.

FIG. 2B illustrates a flow diagram illustrating an example embodiment ofan alternate account number selection process.

FIG. 3 illustrates a portion of an example MICR replacement table inaccordance with one embodiment of the present invention.

DETAILED DESCRIPTION OF PREFERRED EMBODIMENTS

Embodiments of the present invention relate to methods and apparatus forprocessing misread or miskeyed magnetic data located on financialinstruments, such as checks and check cards. Other embodiments of thepresent invention relate to processing financial instrument indicia thatwere misread using an optical scanner or a magnetic check reader ormiskeyed by the customer or merchant.

As discussed in greater detail below, certain embodiments of the presentinvention are related to methods and apparatus for selecting alternatecheck MICR (magnetic ink character recognition) data, such as an accountnumber, when the check MICR data was originally read or enteredincorrectly.

FIG. 1 illustrates an example check processing system 100 that can beused in accordance with an embodiment of the present invention. A pointof sale (POS) terminal 102, a check MICR reader 104, an optical checkscanner 105, and a magnetic stripe reader 106, are located at a merchantsite. The POS terminal 102 may also include a bar code reader. While thePOS terminal 102, the check MICR reader 104, the optical check scanner105, and the magnetic stripe reader 106 are shown as physically separatedevices, two or more of the devices 102-106 can be integrated into thesame housing or transaction terminal. Thus the term transaction terminalas used herein is a device which allows a user to interact with thecommunication medium 110 and to communicate with other portions of thecheck processing system 100, such as the POS terminal 102, a computerworkstation, a local area network of individual computers, a kiosk, apersonal digital assistant, a telephone, a biometrics device used toreceive biometrics information, a private label card, a radio frequencydevice, an interactive wireless communications device, an interactivetelevision, or the like.

The POS terminal 102 includes a keyboard for manual data entry andoptionally includes a dial-up modem, ISDN modem or other modem forconnecting to a communications medium, such as a network 110. The MICRreader 104 includes a magnetic read head (not shown) positioned adjacenta MICR slot (not shown) that is used to read MICR characters on a check.The MICR readings are then converted to digital representations.Alternatively, the MICR characters can be read optically using a scannerand optical character recognition (OCR). In addition, the MICR data maybe provided using bar codes, which are read optically using the bar codereader. Unfortunately, the MICR reading or entry process is often faultyand so electronic checks often fail to clear, as discussed in greaterdetail below.

The magnetic stripe reader 106 includes a magnetic read head (not shown)positioned adjacent a card swipe slot (not shown) that is used toelectronically read a magnetic stripe on an identification card, such asa driver's license, bank card, or the like.

The devices 102-106 are networked to a check acceptance system 108 viathe network 110. The network 110 can be a private network or a publicwide area network, such as the Internet. In other embodiments, thecommunications medium 110 can be any communication system including byway of example, telephone networks, wireless data transmission systems,two-way cable systems, customized computer networks, interactive kiosknetworks, automatic teller machine networks, interactive televisionnetworks, and the like. The check acceptance system 108 includes a hostcomputer and transaction database 109, located on a server system, usedto log and store transaction information. The term computer, as usedherein, comprises one or more computers. The computers comprise, by wayof example, processors, program logic, or other substrate configurationsrepresenting data and instructions, which operate as described herein.In other embodiments, the processors can comprise controller circuitry,processor circuitry, processors, general-purpose single-chip ormulti-chip microprocessors, digital signal processors, embeddedmicroprocessors, microcontrollers and the like.

The transaction database 109 may include two or more databases whichrecord uncollected and cleared check information for checks processed bythe check acceptance system, and an administrative database. The checkacceptance system 108 can be owned or operated by the merchant or by aseparate business entity. The check acceptance system 108 is networkedvia a network 112 to a clearinghouse 114, such as the AutomaticClearinghouse (ACH), the Federal Reserve, a private clearinghouse, orthe like. The clearinghouse 114 is in turn networked to a plurality ofbanks, including a drawee's or payor's bank 116 with which a customerhas a checking account, and a bank with which the merchant has anaccount. The term “bank” as used herein includes banks, saving & loaninstitutions, thrifts, and other financial institution that offeraccounts on which a check may be issued. In other embodiments, aclearinghouse is not used as part of the check processing system 100 andthe check acceptance system 108 interfaces directly with the banks 116.

When a payor, such as a customer, desires to make a purchase or completea transaction using a check, the customer drafts a check and gives it tothe POS operator. If the check is to be electronically processed forACH, the consumer and the check acceptance system 108 may have to firstauthorize the transaction for automated electronic check processing. A“check” refers to a draft or order for a certain sum of money payable ondemand to a certain person or entity named therein or to his order or tobearer. A check is drawn upon a bank or financial institution andpurports to be drawn upon a deposit of funds available to the drawer.Thus, a check can be a physical, paper check, an electronicallyprocessed check, or a check card. The face of a paper check typicallyincludes the drawer's name and address and the name and location of thebank on which the check is drawn. In addition, paper checks includemagnetic ink character recognition (MICR) characters or indicia that maybe read electronically. The MICR characters typically include thedrawer's account number, the drawee bank's transit or routing number,and the check sequence number. The term “account number” or “licensenumber” as used herein includes an account identifier or licenseidentifier having only numbers, both numbers and letters, or numbers,letters and/or other symbols. An example standard for the form of theMICR characters and their position along the bottom edge of the checkare prescribed by ANSI standards X9.27-2000 and X9.13-1999,respectively, which are published by the American National StandardsInstitute, Inc.

The POS operator collects a variety of transaction information using oneor more terminals, collectively referred to as a transaction terminal.For example, the operator enters transaction information, including thedollar value of the transaction, via the POS terminal 102 keyboard. Inaddition, the operator scans the check using check MICR reader 104,which reads the MICR indicia. The operator optically scans the completedcheck using the optical check scanner 105 and the scanned image isstored locally or on a merchant server (not shown). Alternatively, afilm camera can be used to photograph an image of the completed check,wherein the photograph is stored on film. The physical check may then begiven back to the customer or may be stored for future reference by themerchant if allowed by law. Additional customer identificationinformation may be collected by scanning the magnetic strip on thecustomer's driver's license, state identification card or othersupplementary identification device using the magnetic stripe reader106. The identification information can include one or more personalidentifiers associated with the customer, such as the customer'sdriver's license number, social security number, address, phone number,toll road transponder ID, and the like. Further, the customer may beasked to key in a personal identification number (PIN) associated withthe customer's checking account. Optionally, rather than scanning a cardor other identification device, the operator or customer manually entersthe identification information using a keyboard coupled to the POSterminal 102.

Some or all of the transaction information is then transmitted using thePOS modem or other communication device over the network 110 to thecheck acceptance system 108. The check acceptance system 108 then storesthe information in the transaction database 109. The check acceptancesystem 108 optionally provides the POS operator authorization to acceptor decline the check.

The check processing service then submits the MICR data to the checkclearinghouse 114. The MICR data can include the checking accountnumber, routing number, check amount, check number, and other relatedinformation. If the account and routing numbers are correct and thereare sufficient funds in the customer's account, the clearinghouseinstructs in the customer's bank 116 on which the check is drawn todeposit the necessary funds in the merchant's bank 118. The customer'saccount is then debited for the amount of the check by the customer'sbank 116 and the merchant's account in correspondingly credited by themerchant's bank. If the account number or the routing number isincorrect, the check will not clear. The operator of the checkacceptance system 108 is informed that the check has been returned, whythe check was returned, as well as the check account and routing numberprovided when the check was submitted to the clearinghouse.

FIG. 2A is a flow diagram illustrating in greater detail the overallcheck processing process 200A used to process a customer or consumercheck transaction. The process can be used with a physically processedcheck, an electronically processed check, and/or a check or debit cardwhose use is analogous to a check, and the like. However, the process200A is particularly useful where the check processor does not haveaccess to a physical check and hence cannot simply re-scan misread,miskeyed, or otherwise corrupted MICR data. Beginning at state 201A, theprocess proceeds to state 202A, wherein the consumer or merchant entersor scans check data into a transaction terminal. The merchant mayinitiate a transaction by inserting a check into the MICR reader or bymanually entering the MICR data using a terminal keypad. As discussedabove, the MICR characters can also be read optically and converted intotext using OCR. In addition, the check account data, bank routing data,and the like can be stored on a magnetic stripe, such as that found oncredit cards, debit cards and the like. The magnetic card can be readusing magnetic stripe reader positioned in proximity to the transactionterminal's card swipe slot. Further, the MICR data can be entered into aform, such as an electronic form displayed on a monitor, or on a paperform, by the merchant or consumer.

If the check is electronically read using the MICR reader or magneticstripe reader, the transaction terminal will store the account number,routing or bank transit number, check sequence number, and mayoptionally attempt to determine whether the check is a personal check ora company check. At state 204A, the merchant or consumer enters thecheck amount using the terminal's keypad. Proceeding to state 206A, themerchant enters or scans customer or consumer identification data, suchas a driver's license number. If the license includes a magnetic stripe,the license can be swiped through the transaction terminal's card swipeslot, and the relevant data, including include the driver's licensenumber and state of issue, will be captured. In some instances, thelicense or alternate identification data also includes the customer's orconsumer' name and address. If the license data is entered manually, theterminal will prompt the merchant to enter the driver's license numberand the state using the keypad. Alternatively, the customeridentification data can be entered by the merchant or customer into aform, such as an electronic form displayed on a monitor or into a paperform.

At state 208A, the data collected by the merchant is transmitted to thecheck acceptance system where it is parsed into: routing number, accountnumber, and check sequence number. The parsed data is then stored in atransaction database. At state 209A, if a physical check is beingconverted for processing as an electronic check, the customer and/or thecheck processor may optionally first need to provide authorization to doso. At state 210A, using the parsed check MICR data, the checkacceptance system electronically submits the check to a checkclearinghouse. At state 212A, some or all of the MICR information istransmitted to the customer's bank. At state 214A, a determination ismade as to whether the account number and routing number are correct. Ifthey are correct, and if there is sufficient funds in the account, atstate 216A the customer's account is debited.

If the check failed to clear because the account number or/and therouting number is incorrect, then at state 218A an alternate accountnumber or/and routing number is potentially selected by the checkacceptance system 108. FIG. 2B illustrates a flow diagram illustratingan example embodiment of the alternate account number selection process218A in greater detail. The process 218A can be implemented usingprogram logic. In one embodiment, the program logic may advantageouslybe implemented as one or more modules. The modules may advantageously beconfigured to execute on one or more processors. The modules include,but are not limited to, software or hardware components such as softwareobject-oriented software components, class components and taskcomponents, processes methods, functions, attributes, procedures,subroutines, segments of program code, instructions, drivers, firmware,microcode, circuitry, data, databases, data structures, tables, arrays,and variables stored in computer readable memory.

Beginning at start state 202B, the process proceeds to state 204B, wherea check-returned notification is received. The notification includes theaccount number and routing number that had originally been submitted tothe clearinghouse, the check number, and the reason the check wasdeclined, in this case, because the account number or/and routing numberis invalid. At state 206B, the transaction database is searched tolocate the customer's personal identifier using the invalid accountnumber and/or routing number as a search key. As previously discussed,the transaction database can actually include multiple databases. Thesearch can optionally be limited to a specific time period, such as theprevious 2 years or any other time frame, including time framesoccurring after the non-cleared check was drafted. The previously storedtransaction information, including the customer identificationinformation, such as the customer's ID number, is retrieved.

At state 208B the identification information is then used as a searchkey to locate other check transactions recorded in the transactiondatabase associated with the same identification information. At state210B, the located check transactions are further filtered to locatecheck transactions where the check was successfully processed. Thisfilter operation is performed to locate MICR data, such as check accountnumbers and/or associated routing numbers that have proven to be valid.The filter operation may also be used to limit the results to adesignated period, such as checks that were drawn or cleared within thelast year. At state 212B, the check account numbers associated with thefiltered check transactions (hereinafter “filtered valid MICR numbers”)are compared using predetermined criteria with the invalid or corruptedaccount number and/or routing number at issue. In one embodiment, thecomparison is performed on a character-by-character basis and then thedegree of mismatch is determined. The term character, as used herein,includes numbers, letters, symbols, and the like. When the account orrouting “number” includes numbers, as opposed to only symbols, thecomparison can be performed by subtracting the retrieved valid accountnumber from the invalid account number to generate a subtraction result.The following is an illustrative example:

-   -   If the invalid account number is: 123456789    -   and a retrieved valid account number is: 128456788    -   the following subtraction is performed between the invalid        account number and the valid filtered account number:    -   123456789 Invalid Account Number    -   128456788 Valid Account Number    -   005000001 Subtraction Result

The number of character mismatches is determined for each of the validfiltered account numbers. This can be performed by determining how manynon-zero digits there are in the subtraction result. In the aboveexample, there are two non-zero characters, the “5” and the “1”. Asimilar operation can be performed for an incorrect or invalid routingnumber.

In another embodiment, both the valid check account numbers and routingnumbers, also referred to respectively as the “new account number” andthe “new routing number,” are compared using predetermined criteria withthe invalid, corrupted account number and/or routing number at issue.The account number and routing number received with the check, alsoreferred to respectively as the “old account number” and the “oldrouting number”, are concatenated together. The concatenation of the oldaccount number and the old routing number is compared to a concatenationof the new account number and the new routing number. The comparison canbe performed on a character-by-character basis using a software comparecommand which returns a “0” value if two characters match and a “1” ifthey fail to match. Once the comparison is complete the number of “1s”are summed and the sum indicates the degree of mismatch.

The following is an illustrative example:

-   -   If the old routing number is: 987654321    -   and the old account number is: 123456789    -   then the concatenated old routing and account numbers is:        987654321123456789    -   If the new routing number is: 987654322    -   and the new account number is: 133456789    -   then the concatenated new routing and account numbers is:        987654322133456789    -   The degree of mismatch is then determined as follows:        987654321123456789 (concatenated old routing number and old        account number)    -   is compared with    -   987654322133456789 (concatenated new routing number and new        account number)    -   000000001010000000 Comparison Result    -   Sum of digits of comparison result {0000000010100000000}=2

In the above comparison example, there are two “1s”, indicating a degreeof mismatch of two.

At state 214B a determination is made as to whether the number ofcharacter mismatches meets an acceptance criteria, which in this exampleis defined as “is the number of character mismatches less than or equalto a predetermined number.” If the number of character mismatches meetsthe acceptance criteria, this indicates that the valid filtered accountnumber and/or routing number is a possible “match” for the invalidaccount number and/or routing number. The predetermined number selectioncan be based on how certain the operator of the check acceptance system108 wants to be that a true match has been located. If the operatordesires a relatively high degree of certainty, the predetermined number,also referred to as the “difference criteria,” may be set to “1,” thatis, the invalid account number and/or routing number can differ by thevalid filtered account number and/or routing number by only onecharacter. By way of another example, if relatively less certainty isrequired, the difference criteria may be set to “3”, that is, theinvalid account number and/or routing number can differ by the validfiltered account number and/or routing number by three characters. Ofcourse other criteria can be used as well.

At state 216B a determination is made as to whether more than one of thevalid filtered account numbers and/or routing number is a potentialclose match for the invalid account number and/or routing number basedon the criteria used at state 214B. If more than one valid filteredaccount number and/or routing number has been determined to be apossible close match, then optionally the process proceeds to end state222B, and the check is not resubmitted using one of the potentialmatches as an alternate account number and/or routing number. This isbecause with more than one potential match the operator may not want torisk resubmitting the check with a valid, but incorrect account numberand/or routing number. For example, a customer may have two checkingaccounts that differ by only one digit and so it may not be possible todetermine which account number is correct if the one digit that isdifferent is in the same location as the misread or miskeyed MICRcharacter. In such a situation, a call to the customer's bank can bemade to determine or verify the correct account number. Alternatively,the process performed at state 214B is repeated using narrower “match”criteria. For example, if originally the difference criteria was set to“3”, the comparison process can be repeated with the difference criteriaset to “1”. If there is still more than one potential match, then theprocess will end as similarly discussed above.

If only one potential matching filtered valid account number and/orrouting number is found, then at state 218B the potential matchingfiltered valid account number and/or routing number is stored in thetransaction database in association with the transaction information forthe check. At state 220B the check is resubmitted to the clearinghousewith the filtered valid account number and/or routing number. Theprocess then ends at state 222B and the check is settled. Optionally, ifthe check still fails to clear, an entry is created in the transactiondatabase indicating that the filtered valid account number and/orrouting number should not be used in the future as an alternate accountnumber and/or routing number for the invalid account number. A reportcan be generated periodically providing the number of check transactionsthat have been successfully cleared as a result of the process 218A. Theexample process 218A can be performed automatically using a computer, orall or portions of the process 218A can be performed manually by a humanoperator. While the example process 218A as illustrated is discussedwith reference to processing an incorrect or invalid check accountnumber, the process can also be applied to other misread or miskeyedcheck fields or other types of data.

In one embodiment, the difference criteria can be varied depending on avariety of factors. By way of example and not limitation, if the valueof the check exceeds a predetermined threshold, then the differencecriteria can be set to tolerate a larger or a smaller degree ofdifferences. By way of another example, if the potential matchingfiltered valid account number and/or routing number has not been usedwithin a predetermined amount of time, such as one year, then thedifference criteria can be set to tolerate a smaller degree ofdifference. Of course, other factors may affect what difference criteriaare used. In addition, the comparison of the invalid check accountnumber to the filtered valid check account numbers can optionally beweighted so that certain MICR character position differences areweighted more heavily in the comparison than others. Optionally, onlythe values of selected predetermined character positions are compared.

The process 218A can result in a greater than 60% clearance rate forchecks that have previously been declined due to an improper MICRcharacter reading. This results in a higher check clearance rate.Because more checks are cleared, the merchant's collections areimproved, or, if the merchant utilizes the services of a checkprocessor, the check processor's collections are improved.

FIG. 3 illustrates a portion of an example MICR replacement table 300generated as a result of a search for alternate MICR data that arepotential replacements for misread, miskeyed or otherwise corruptedaccount numbers and/routing numbers. The table has 16 columns or fields.The fields are as follows:

Area: This is an internal identifier that can be associated, by way ofexample, with a region, state, the Internet, or the like, where thecheck at issue that failed to clear (“the check at issue”) wassubmitted, or the Area can be unrelated to the region of origin, thatis, not associated with a particular region or state.

Log_Num: This is the log number assigned to the transaction involvingthe check at issue. The combination of the Area value and the Log numbercan be used to uniquely identify a given transaction.

DIGIT_DIFF: This field is used to store the difference between the checkat issue's concatenated routing number (“old routing number”) andaccount number (“old account number”), wherein one or both of the oldrouting and account numbers may have been incorrectly read, and aconcatenation of successfully process check's valid routing number (“newrouting number”) and a valid account number (“new account number”).

RT_DIFF: This field is used to store the difference between the “old”routing number, stored in the OLD_RT field, and a selected alternate,valid routing number associated with the successfully processed check,stored in the NEW_RT field. This field is used in embodiments wherealternate routing numbers are located to use in place of a corruptedrouting number.

ACCT_DIFF: This field is used to store the difference between the “old”account number stored in the OLD_ACCT field, and a valid account numberfor a successfully processed check, stored in the NEW_ACCT field.

OLD_RT: This field is used to store the routing number of the check atissue.

NEW_RT: This field is used to store a valid routing number read from thesuccessfully processed check, wherein the valid routing number ispotentially to be used in place of the routing number in the OLD_RTfield.

OLD_ACCT: This field is used to store the checking account number of thecheck at issue.

NEW_ACCT: This field is used to store a valid account number of asuccessfully processed check to potentially be used in place of theaccount number in the OLD_ACCT field.

CHECK_NUM_COLL: This field is used to store the check number of thecheck at issue.

CHECK_AMT_COLL: This field is used to store the check amount for thecheck at issue.

RCV_DT: This field is used to store the date the check at issue wasreturned to the check processor.

PRSN_ID_(—)1: This field is to be used to store a personal identifier,such as a driver's license or social security number that was providedwhen the check at issue was submitted to the merchant.

STAT_CDE: This field is used to stored a status code (for example,“A”=active)

SUBSCR_CODE: This field used to store the subscriber code to which thecheck was written and can be uniquely associated with a given merchantor store.

SOURCE_AREA: This field indicates the Area value for the transactionassociated with the successfully processed check corresponding to therouting number and account number in the NEW_RT field and the NEW_ACCTfield.

SOURCE_MICR: This field indicates which database stores the transactiondata associated with the check corresponding to the routing number andaccount number in the NEW_RT field and the NEW_ACCT field. For example,the database can be the Call Detail database or the Collectionsdatabase.

By way of example, in record 302, the routing number 322271627 in theOLD_RT field and the account number 73439365101 in the OLD_ACCT fieldcorrespond to a check that failed to clear. A driver's license numberCFP0428027 in the PRSN_ID_(—)1 field is associated with the payor of thecheck. The driver's license number has been used as a search key tolocate data from another check associated with the driver's licensenumber. The routing number 322271627 in the NEW_RT field and the accountnumber 7343986511 in the NEW_ACCT field correspond to a check associatedwith the driver's license number in the PRSN_ID_(—)1. As indicated inthe RT_DIFF and ACCT_DIFF fields, the “old” routing number matches the“new” routing number, and the “new” account number differs from the“old” account number by “3”. The DIGIT_DIFF field stores the result of acomparison of a concatenation of “old” routing and account numbers inthe OLD_RT and OLD_ACCT fields with a concatenation of the routing andaccount numbers in the NEW_RT and NEW_ACCT fields. In this example, theydiffer by three digits. If the acceptance criteria is set to three, the“new” account number is a suitable alternate for the “old” accountnumber. If the acceptance criteria are set to two or less, the “new”account number is not a suitable alternate for the “old” account number.

Optionally, the search for alternate MICR or account data can berestricted so as to exclude checks associated with certain Source Areas,such as those checks wherein the account data was received as part of anInternet transaction. This advantageously excludes certain areas thathave a significantly higher likelihood of having incorrect or falsifiedMICR or account data. Similarly, the search for alternate MICR oraccount data can be restricted so as to exclude checks associated withcertain Subscriber Codes or exclude checks written to merchants whohistorically have a high level of inaccuracies in their MICR datareadings.

As illustrated in FIG. 3, several potential match record may be providedfor a given corrupted account number and/or routing number. There may beseveral potential matches because there are several previously processedchecks associated with the same personal identifier. Thus for example,records 304, 306, 308 contain the search results for alternate MICR touse in place of “old account” number 40534708. Each of the records 304,306, 308 includes MICR data corresponding to previously processed checksthat are associated with the same personal identifier, LA7082383, in thePRSN_ID_(—)1 field. In this example, each previously processed check isassociated with a different Source Area. In one embodiment, if there aremultiple source areas for previously processed checks, wherein eachcheck has the same account and routing data, then a higher matchlikelihood is assigned to the “new” account and routing numbers. In thisexample, each of the records 304, 306, 308 have the same “new” accountand routing numbers in the NEW_ACCT and NEW_RT fields. Thus, the valuein the DIGIT_DIFF field is the same for all records 304, 306, 308.

Of course other table schema having fewer or additional fields than thatshown in FIG. 3 can be used as well.

Thus, as described above, the present invention advantageously providesmethods and apparatus for increasing the check clearance rate, even whena check's MICR characters have been misread or miskeyed. The higher rateof check clearance results in financial and operational benefits for themerchant, the check processor, and/or check processor.

While certain embodiments of the inventions have been described, theseembodiments have been presented by way of example only, and are notintended to limit the scope of the inventions. Indeed, the novel methodsand systems described herein may be embodied in a variety of other formswithout departing from the spirit thereof. The accompanying claims andtheir equivalents are intended to cover such forms or modifications aswould fall within the scope and spirit of the inventions.

1. A method of correcting corrupted magnetic ink character recognition(MICR) indicia data, the method comprising: receiving over a network afirst account number for a check drafted by a payor, the first accountnumber obtained from MICR indicia on the draft check; receiving over thenetwork a driver's license number associated with the payor inassociation with the first account number; storing in computer readablememory the first account number in association with the driver's licensenumber; submitting the draft check for clearance, the submissioncomprising the first account number; receiving an indication that thedraft check failed to clear at least in part because the first accountnumber is corrupted; locating a database record for at least apreviously cleared check associated with the driver's license number;reading a second account number, the second account number associatedwith the previously cleared check; comparing at least the corruptedaccount number with at least the second account number; determining ifthe second account number is a potential correct number for thecorrupted account number, based at least in part on the comparison; andresubmitting the draft check for clearance, the resubmission comprisingthe second account number when the second account number is a potentialcorrect number for the corrupted account number.
 2. The method of claim1, wherein locating the database record for the previously cleared checkcomprises searching a database for checks that have cleared, wherein thesearch is limited to checks associated with transactions that occurredwithin a time period.
 3. The method of claim 1, wherein locating thedatabase record for the previously cleared check comprises searching adatabase for checks that have cleared, wherein the search is limited toexclude checks received from customers from designated areas.
 4. Themethod of claim 1, wherein locating the database record for thepreviously cleared check comprises searching a database for checks thathave cleared, wherein the search is limited to exclude checks whose MICRdata was received from designated merchants.
 5. The method of claim 1,wherein the corrupted account number is received from a merchantterminal.
 6. A method of correcting corrupted magnetic ink characterrecognition (MICR) indicia data, the method comprising: receiving over anetwork MICR data associated with a financial instrument drafted by apayor, the MICR data obtained from MICR indicia on the financialinstrument; receiving over the network information identifying thepayor; associating the information with the MICR data in a database;submitting the financial instrument for clearance, the submissionincluding the MICR data; receiving an indication that the submittedfinancial instrument failed to clear, wherein the submitted MICR datacomprises corrupted MICR data; locating additional MICR data associatedwith the information in the database; filtering the located MICR data toidentify filtered MICR data associated with a previously clearedfinancial instrument; comparing the filtered MICR data with thecorrupted MICR data; and storing the filtered MICR data as correctedMICR data in the database based at least in part on the comparison. 7.The method of claim 6, further comprising resubmitting the failedfinancial instrument with the corrected MICR data.
 8. The method ofclaim 6, wherein comparing the filtered MICR data with the corruptedMICR data comprises: subtracting at least a portion of the filtered MICRdata from at least a corresponding portion of the corrupted MICR data toproduce a subtraction result; summing the number of non-zero digits inthe subtraction result; and comparing the sum with a threshold.
 9. Themethod of claim 6, wherein comparing the filtered MICR data with thecorrupted MICR data comprises: comparing character by character at leasta portion of the filtered MICR data with at least a correspondingportion of the corrupted MICR data; producing a 1 value if thecharacters match; producing a 0 value if the characters do not match;summing the 1 values once the comparison is complete; and comparing thesum with a threshold.
 10. The method of claim 6, wherein the informationcomprises at least one of a driver's license number, a social securitynumber, an address, a phone number, and a toll road transponder.
 11. Themethod of claim 6, wherein the MICR data comprises a routing number andan account number.
 12. The method of claim 6, wherein the MICR datacomprises an account number.
 13. The method of claim 6, furthercomprising excluding filtered MICR data based at least in part on atleast one of a source area and a subscriber code.
 14. An apparatus tocorrect corrupted magnetic ink character recognition (MICR) indiciadata, the apparatus comprising: a first network to receive MICR dataassociated with a check drafted by a payor and to receive informationidentifying the payor, wherein the MICR data is obtained from MICRindicia on the check; a database to store the information and the MICRdata, wherein the information is associated with the MICR data in thedatabase; a computer program to correct corrupt MICR data for processingof the check when at least a portion of the submitted MICR dataassociated with the check is invalid, the computer program comprising:computer code stored on computer-readable media configured to receive anindication that the submitted check failed to clear, wherein thesubmitted MICR data comprises corrupted MICR data; computer code storedon computer-readable media configured to locate MICR data of a clearedcheck associated with the information; computer code stored oncomputer-readable media configured to calculate a number of charactermismatches between at least a portion of the located MICR data and atleast a corresponding portion of the corrupted MICR data; and computercode stored on computer-readable media configured to store the locatedMICR data as corrected MICR data in the database based at least in parton the number of character mismatches.
 15. The apparatus of claim 14,wherein the computer code configured to calculate the number ofcharacter mismatches comprises: computer code stored oncomputer-readable media configured to subtract at least a portion of thelocated MICR data from at least a corresponding portion of the corruptedMICR data to produce a subtraction result; and computer code stored oncomputer-readable media configured to sum the number of non-zero digitsin the subtraction result.
 16. The apparatus of claim 14, wherein thecomputer code configured to calculate the number of character mismatchescomprises: computer code stored on computer-readable media configured tocompare character by character at least a portion of the located MICRdata with at least a corresponding portion of the corrupted MICR data;computer code stored on computer-readable media configured to produce a1 value if the characters match; computer code stored oncomputer-readable media configured to produce a 0 value if thecharacters do not match; and computer code stored on computer-readablemedia configured to sum the 1 values once the comparison is complete.17. The apparatus of claim 14, wherein the information comprises atleast one of a driver's license number, a social security number, anaddress, a phone number, and a toll road transponder.
 18. The apparatusof claim 14, wherein the MICR data comprises a routing number and anaccount number.
 19. The apparatus of claim 14, wherein the MICR datacomprises an account number.
 20. The apparatus of claim 14, furthercomprising excluding located MICR data based at least in part on atleast one of a source area and a subscriber code.